The Government extends its conservative GLS stance for private housing

December 07, 2018

Ms. Tay Huey Ying, Head of Research and Consultancy, Singapore 
郑惠匀, 研究与咨询部主管 (新加坡) 

The government has continued on its conservative stance and trimmed the supply of government land sales for private homes (excluding ECs) by 18.4%, from 2010 units in the 2H2018 Confirmed List programme, to 1,640 units in the 1H2019 Confirmed List Programme.  This is in response to their concern about the huge supply pipeline to be generated from the buoyant collective sales in 2017 and 1H2018.

The number of buildable private housing units from the residential plots that will be made available for sale on the reserve list in the 1H 2019 programme has also fallen by 18.6% to 3,925 units, from the 4,820 units in the 2H2018 programme.

In terms of location, the site at Tan Quee Lan Street is assessed to be the most attractive as it is located right next to the Bugis MRT station. The fact that the government has moved the site from the Reserved List on the 2H2018 programme to the Confirmed List on the 1H2019 programme indicates its desire to build on the momentum gathered from the completion of new skyscraper developments such as South Beach and DUO, as well as the upcoming Guoco Midtown scheduled for completion in 2022 in its efforts to rejuvenate the Bugis area. However, it is a fairly large site and together with its prime location could translate to a rather substantial capital outlay that could limit the number of interested bidders to those with larger risk appetite. 

The Bernam Street and one-north Gateway sites on the Confirmed List could draw a healthy level of interest from developers for their bite-size plot sizes which would be more digestible for small and medium-sized developers amid the current cautious market sentiment.  The one-north Gateway site is also in a location which has been starved of new residential supply. The last time a new residential project was launched in one-north was more than 10 years ago when The Rochester and One North Residences were launched for sale in 2007

The sole EC site in the 1H2019 Confirmed List should draw keen competition from developers, and help to rebuild the stock of EC supply in the market.  To some extent, this should provide some relief to the sandwiched class of potential home purchasers.

It is a good approach for the Government to continue to ensure a steady stream of land supply for private homes to prevent a repeat of the situation in 2017/1H2018 when developers’ depleting landbank led to the overheated land market accompanied by runaway land prices.   

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